Federal law allows certain claims under state law to be heard in federal court if the claims involve plaintiffs and defendants that are citizens of different states. Having a case heard in federal court is often beneficial to out-of-state corporations who may not enjoy a fair hearing in certain state courts. This case involves how to define the state of citizenship of a corporation.
On February 23, 2010, the Supreme Court ruled that a corporation's principal place of business means the place where the corporation's high level officers direct, control, and coordinate the corporation's activities, i.e., its "nerve center," which will typically be found at its corporate headquarters. This conclusion may be difficult to apply in a few cases, but it will avoid overly complicated jurisdictional questions in most cases and will make for a more uniform legal system.